WeChat Payment and Alipay, the Supermarket War

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(Chinese Version)

Recently, WeChat and Alipay are competing fiercely over an important offline resource, the supermarkets. Both sides have been offering cash-back and discounts in an attempt to attract more users. Domestic supermarket brands are no longer the main participants since international chain giants like Carrefour also see the opportunities and are planning to keep up with this trend as well.

Ironically, while both Alipay and WeChat treat Carrefour as their VIP client, Carrefour openly stated that the company would accept offers from both parties and use both platforms.

Alipay Wallet possesses greater momentum as a pioneer

On April 28 this year, Alipay Wallet announced that it had reached agreements to partner with the domestic giant China Resources Vanguard Company, and the international heavyweight Carrefour. Supermarket chains like Vanguard, China Resource SUGUO, Fun², Ole’, and blt etc. from China Resources Vanguard Company will adopt Alipay Wallet system in no time. Over a thousand supermarkets in Jiangsu, Jiangxi, and Zhejiang provinces already have the system in place so that customers can pay their groceries with a quick scan on the QR code generated on their phones. Carrefour supermarkets in Beijing, Shanghai, and Hangzhou also have this service in place and support online payment via Alipay Wallet.

Of course, discount is a must when it comes to attracting users to a certain mobile payment platform. It’s a common practice for Internet companies. In this case, if you want some lucky money packs from these companies, better keep an eye on their discounts and cash-back information these days. Vanguard revealed that starting from April 28, over a thousand stores in Nanking city, Jiangxi and Zhejiang provinces would have 10% off discounts for a month. Customers who use Alipay Wallet to pay their groceries can enjoy a 10% off discount up to 5 RMB. Every user has a 10% off opportunity and can participate in a lucky draw activity in which they might win back a 100 RMB lucky money pack.

As for Carrefour, it openly announced that its supermarkets in Beijing, Shanghai and Hangzhou would launch similar discount activities that would last for a month, starting from May 1: spending an overall amount of over 50 RMB, customers would get a 5 RMB cash-back every Friday, Saturday, and Sunday, while from Monday to Thursday customers who use Alipay Wallet to pay would have the chance to participate in a lucky draw activity and win back a 100 RMB lucky money pack, similar to what Vanguard is doing.

Alipay Wallet has been working hard on this particular field for over two years and has built a rather large user base, forming the very foundation for Alipay Wallet to explore and experiment on offline scenarios. On April 28, Wang Lijuan, general manager of Antgroup’s O2O division, suggested at the 2015GMIC that up till now, there’re over 270 million active users on Alipay’s mobile platform. With the emergence of the new wave brought by the Internet+ strategy, traditional offline businesses are facing an important turning point of industrial upgrading.

In fact, during last year's Double 12 Shopping Festival (December 12, known as the Chinese "Black Friday") last year, Alipay have already made quite a few attempts in offline supermarket sector, creating a big stir in many supermarkets. On that particular day, over a hundred brands and around 20, 000 stores in China all participated in the shopping festival, offering 50% off discounts to those who used Alipay Wallet to complete their purchases. After 2 years of hard work, Alipay’s service now covers most major supermarket brands like FamilyMart, Wu Mart, C-Store, Century Mart, and Alldays etc. And just rercently, Vangurad and Carrefour have also joined the team.

WeChat counters back by launching city service payments, aiming to build smart cities

On April 22, WeChat Payment teamed up with Carrefour China , so that all 237 Carrefour supermarkets in China will support its mobile payment service. 12 Carrefour supermarkets in Guangzhou and Shenzhen will be the first batch to have WeChat payment service in place early this month while the second batch, which includes those supermarkets in Beijing, Shanghai, Hangzhou, Wuhan, Chongqing, Shenyang and Chengdu, will have the system installed by the end of this month. Carrefour supermarkets in other cities will also enter this new era in no time. It’s fair to say that WeChat’s mobile payment service will cover every Carrefour supermarket in China in the near future.

Not long ago, WeChat launched an activity called the "WeChat Payment Day" every Tuesday. In this activity, users could enjoy a 10 RMB or above coupon if spending more than 10 RMB on WeChat during one purchase.

WeChat claimed that WeChat Payment & WeChat Official Account Service solution, which modifies the pre-sale, sales, and after-sales operations, will help Carrefour build a comprehensive relationship with its customers and eventually keep them connected to its supermarkets everywhere and everytime. Very soon, customers can shop and get discount coupons via their smart phones. Additionally, customers will be able to charge their VIP membership cards virtually and even interact with Carrefour directly through its official account on WeChat so as to enjoy other services such as e-commerce and customer service.

The battle for mobile payment scenarios

Both Alipay Wallet and WeChat Payment greatly shorten the purchasing process and make it convenient for users to buy goods. In the past, customers needed to spend a lot of time by the counter paying for their groceries. Just think about this: in the past, you would have to open your wallet and flick through different cards, and then you would need to wait for the paying process to end and sign the receipt. If you paid your stuffs in cash, then you might need to wait for the clerk to find change for you. Sometimes, it could probably take a long time if there was no change at the counter. But now customers can pay everything with just a quick scan on their phones, whether via Alipay Wallet or WeChat Payment within no more than 3 seconds. Compared to paying in cash, now you don’t have to wait for the clerk to find change for you and worry about getting forged notes. It makes the whole process much faster and less complicated.

However, Alipay and WeChat’s true intention is to expand their offline scenarios of mobile payment service. In short, they want to keep their current users and continue to attract more. From the Lucky money war during the Spring Festival to Didi Taxi and Kuaidi’s adoption of these two platforms respectively, we have been witnessing the rapid expansion of mobile payment scenarios. (More details on WeChat Hasn’t Defeated Alipay Yet, The Outcome Depends On Scenarios Buidling) Their competition will only get fiercer over time, and the one that can dominate everyday businesses will certainly take the lead.

As for supermarkets, choosing to team up with Alipay Wallet or WeChat Payment will no doubt help them transform to O2O model and upgrade their services. Given these circumstances, it’s a great time for supermarket chains to build an O2O closed-loop mechanism right now.

(The article is published and edited with authorization from the author @Wang Zhen, please note source and hyperlink when reproduce.)

Translated by Garrett Lee (Senior Translator at Echo), working for TMTpost.